FTSE bounces back as price of oil heads up

Market report Emma Newlands

London’s blue-chip index rebounded as investors piled into commodity stocks in response to the rising oil price.

The FTSE 100 Index climbed 64.37 points to 7,377.09, driven by a strong performance from the mining giants, with Glencore soaring 14.4p, to 301.6p. Oil major BP was also in the ascendency, up 8.5p to 451.3p, as Brent crude rose 1.4 per cent to $49.44 a barrel.

On the currency markets, the pound took a tumble after the latest update on Britain’s manufacturing industry came in shy of expectations. Sterling was down 0.5 per cent versus the US dollar at $1.294, with a slowdown in new orders causing industry output to drift to a three-month low.

The closely watched Markit/cips UK Manufacturing purchasing managers’ index showed a reading of 54.3 last month, down from 56.3 in May and below economists’ forecasts of 56.4. A reading above 50 indicates growth.

The pound was also marginally down against the euro at €1.138.

In UK stocks, Britain’s banking giants enjoyed a strong session, as investors priced in comments last week from Bank of England governor Mark Carney suggesting interest rates could rise.

Royal Bank of Scotland skipped 8.3p higher to 255.5p, and HSBC rose 18.10p to 729.8p.

The biggest risers on the FTSE 100 Index included Rio Tinto, up 132.5p to 3,374.5p, and Anglo American, up 41p to 1,065p. The biggest fallers included Micro Focus International, down 42p to 2,229p, and Hargreaves Lansdown, down 21p to 1,281p. The retailer raced ahead after annual pre-tax profits grew by more than half and it announced plans to launch standalone sportswear stores. The sub-prime lender was the worst performer on the FTSE 100, with Liberum cutting its price target on the firm to 2,000p from 2,770p.